A week ago, the TARP inspector general, Neil Barofsky, added up all the potential taxpayer costs for saving the financial system, and the figure came to $23.7 trillion. It’s highly unlikely that will be the bill, but when you read this, you’ll see that’s not the point:
I dug into this because when I read Barofsky’s report last week, I thought, what good does that number do? What are we paying this guy for? $23.7 trillion assumes every government program fails completely and the entire economy is sucked into a black hole, basically. It’s highly unrealistic. The Treasury Department attacked the report, saying Barofsky’s number was “inflated.”
Then I listened to a podcast interview ABC’s Jake Tapper did with Barofsky. Here’s the link to the MP3. Tapper asks Barofsky about the Treasury’s criticism:
Where do you think we got the numbers from? We got them from the Treasury Department. We got them from the Federal Reserve. We got them from their websites and statements they’ve made to Congress. If these numbers are inflated, it’s because they inflated them when put them out in the public. Not because of us. All we’ve done is gather the 50 programs, put them in one place and told the American people what the government has said about the maximum of each of those programs…
Perhaps their criticism is that we dared to do math.
Barofsky’s point in totaling all this stuff up is the unprecedented transparency that the administration promised when these programs began. Give people as much information as possible. In that vein, Barofsky admits he contributed to President Obama’s campaign and that he’s a long-time Democrat. That doesn’t seem to be influencing his work as an independent watchdog. Tapper asks Barofsky whether the administration has fulfilled its promise of transparency:
From the Treasury’s perspective, no. Treasury is not being transparent with respect to the TARP. They’ve failed to adopt some very basic recommendations we’ve had towards transparency. And frankly, this recent attack on my report is really in many ways an attack on basic transparency, of not wanting the American people, in a certain way, to see exactly what’s going in their government.
Not only that, but at Salon.com, Glenn Greenwald says a war is being waged on Barofsky’s independence:
… the Obama administration is now attempting to induce the Justice Department to issue a ruling that Barofsky’s office is not independent at all — but rather, is subject to, and under the supervision of, the authority of Treasury Secretary Tim Geithner. By design, such a ruling would completely gut Barofsky’s ability to compel transparency and exercise real oversight over how Treasury is administering TARP, since it would make him subordinate to one of the very officials whose actions Congress wanted him to oversee: the Treasury Secretary’s.
Barofsky has, quite rightly, protested the administration’s efforts to destroy his independence, and has done so with increasing assertiveness as the administration’s war on his oversight activities has increased. Why would an administration vowing a New Era of Transparency wage war on a watchdog whose only mission is to ensure transparency and accountability in these massive financial programs?
It’s absolutely baffling. Not surprising, but baffling, as so many things have been during this recession. One more example from Greenwald:
Separately, Barofsky has continuously disputed White House claims that it’s impossible to account for what has been done by banks with the TARP funds. Barofsky wants to compel banks to account for those funds and then publicize that information, while the administration opposes such efforts, claiming that accounting for TARP monies is impossible due to the “fungibility” of those funds.
To disprove that claim, Barofsky sent out voluntary surveys to the bank which proved that those funds could be tracked (and he found TARP funds were being used by receiving banks largely to acquire other institutions and/or create “capital cushions” rather than increase lending activity, the principal justification for TARP).
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